Giant Eagle Offers Employee Buyouts Amidst Falling Food Prices
Giant Eagle announced Tuesday that they will offer buy outs to 340 of its corporate employees. But the Pittsburgh-based chain may not be the only grocery story experiencing hard times.
Giant Eagle says competition from other food retailers and falling food prices are behind their need to cut operating costs.
Matt Roberts, an Agricultural Economist at the Ohio State University, says food prices have gone down across the country due to something called a "commodities cycle."
You might remember a few years ago the price of grains, meat and dairy went up slightly. According to the USDA, today a gallon of whole milk cost about 50 cents less than it did in 2014.
Roberts says this was due to an increased demand for foods like grain and corn on a global scale.
One example he gives is China. Roberts says the country's demand for U.S. soybeans grew significantly from 2000 to 2015.
"By the equivalent of 65 million acres," Roberts says. "Now to put that in context, Illinois produces about 23 million acres of row crops."
Roberts says that demand caused the price of food to spike and spurred an expansion in food production.
"Now we're left with over-supplied markets and much lower prices," Roberts says.
Other grocery chains may also be feeling the volatile environment. The Cincinnati based Kroger has also cited a drop of 1.5 percent in food prices.
Giant Eagle reports nearly $10 billion dollars in annual sales and more than 400 grocery and convenience store locations, 50 of which are in the Columbus area.